Dornbirn, Austria – Following the highest revenues in the company’s history and a significant improvement in profitability during 2014/15, the international lighting company Zumtobel Group recorded sound development in the first quarter of the current financial year (May to July 2015). Group revenues rose by 5.9% to EUR 342.4 million for the reporting quarter (previous year: EUR 323.5 million) supported by positive currency translation effects. After adjustment for these effects, revenues rose by 0.5%. The main growth driver was once again the Group’s business with innovative and energy-efficient LED luminaires and components. Rising 48.0% to reach EUR 206.2 million, the LED share of Group revenues increased from 43.1% to 60.2% year-on-year.
Components show positive development; temporary negative effects in Lighting Segment
A breakdown by segment reveals different developments. The Components Segment (Tridonic brand) reported very positive development in the first quarter, continuing to make good progress in systematically strengthening its focus on LED technology. Total segment revenues in Q1 increased by 13.3% to EUR 109.3 million (previous year: EUR 96.6 million) or by 8.3% after adjustment for positive foreign exchange effects. Developments in the Lighting Segment (Thorn and Zumtobel brands) were far more subdued. Revenues here rose by 4.7% to EUR 254.8 million (previous year: EUR 243.4 million), showing a 0.5% decline after adjustment for foreign exchange effects. This development was due to a number of temporary negative effects including supply shortages at several lighting plants as well as continuing pressure on prices, a market-related sharp drop in demand in France and the continuing restructuring process in Asia.
Adjusted EBIT in line with expectations; marked improvement in net profit for the period
The abovementioned temporary negative effects also impacted on adjusted EBIT for the reporting period and overshadowed the efficiency improvements brought about by the systematic implementation of restructuring measures. Earnings were further influenced by a substantial increase in research and development costs, which rose EUR 4.8 million to EUR 20.9 million, and by temporary negative currency translation effects. As a result, adjusted Group EBIT declined to EUR 13.5 million in the first quarter of 2015/16 (previous year: EUR 19.1 million). The return on sales (adjusted EBIT margin) stood at 3.9% (previous year: 5.9%). These temporary negative effects had been anticipated by management for some time and were therefore already reflected in the communicated guidance for the 2015/16 financial year.
Due to the year-on-year decline in restructuring expenses, net profit showed sound improvement, rising by 60.8% to EUR 9.2 million in the reporting period (previous year: EUR 5.7 million). As a result, earnings per share for the shareholders of Zumtobel Group AG totalled EUR 0.21 (previous year: EUR 0.13).
“The systematic implementation of our strategic redirection is still firmly on track. We have made a sound start to the new financial year, facing several challenges that we will master in the course of the year. In autumn we will be bringing further innovative and highly competitive products to market both in Europe and in Asia. In our European core markets in particular the market environment remains positive, and this is reflected in a high level of project activity and well-filled order books for the coming months,” said CEO Ulrich Schumacher commenting on the first quarter.
Workforce totals 7,084 full-time equivalents
Compared to the end of the first quarter of the previous financial year, the size of the workforce fell by 2.1% to its current level of 7,084 full-time equivalents including contract workers but excluding apprentices (31 July 2014: 7,234). Structural job losses at the production plants and in lighting sales were offset by the volume-driven hiring of direct production workers. The number of employees in Austria rose by 8.7% in the reporting period to 2,364 full-time equivalents. The size of the workforce in Vorarlberg increased by 10.3% to a current total of 2,083 employees. This increase is largely due to a rise in the number of direct production workers as well as the integration of employees in the IT infrastructure sector who were previously employed by an external service provider.
Management Board confirms outlook for 2015/16
With a view to the strategic development of the Zumtobel Group, the Management Board remains focused on the adjustment of production capacity, a multi-brand sales structure in the Lighting Segment and the Group-wide bundling of procurement activities. These are the key factors that will support a sustainable increase in revenues and strengthen profitability. At the same time the Management Board is also evaluating further opportunities to optimise structural costs. Against this backdrop, the Management Board confirms the previously communicated guidance for the 2015/16 financial year, which calls for an increase of roughly 5% in revenues and adjusted EBIT of EUR 90 to 100 million (FY 2014/15: EUR 66.5 million).
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